Industry Updates

LGIM sees ETF revenues triple following 2018 Canvas acquisition

Annualised net new revenue from ETFs hit $1.5m in H1

Theo Andrew

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Legal & General Investment Management (LGIM) has tripled revenues of its ETF platform since acquiring Canvas from ETF Securities in 2018.

In its latest set of results, LGIM said it recorded $1.2bn of inflows into its ETF business in the first half of the year, delivering annualised net new revenue of $1.5m.

LGIM said revenues had tripled in the five years since it took control of Canvas, which had 17 ETFs with $2.5bn assets under management (AUM) across equities, fixed income and commodities.

LGIM currently has 49 ETFs with $12.6bn AUM, as at the end of June.

The UK giant said ETFs are a key driver of its global wholesale strategy with the wrapper leading its growth in Europe alongside active fixed income and responsible investing.

“A key driver of our global wholesale growth strategy is our ETF products which continue to perform well,” LGIM said.  

“Since acquisition of the ETF business in 2018, revenue has more than tripled. The range has continued to show resilience, against a challenging backdrop, with $1.2bn of external net flows in H1 2023 delivering an annualised net new revenue of $1.5m.”

It added it is the second biggest thematic ETF issuer in Europe by AUM, behind BlackRock, a legacy of the Canvas acquisition.

Since then, the group has looked to build on this platform as well as expanding its all-round offering through fixed income and commodity ETFs.

LGIM said at the time it would look to leverage its then $587bn index business to develop its ETF product range.

“Our diversified range consisting of equity thematic, fixed income, and commodities ETFs has supported our strategy of growth into higher-margin areas,” the group said.

“Our targeted product pipeline for H2 continues to focus on thematic investments, climate and energy transition.”

This year, LGIM has been focusing on growing its retail footprint through partnerships with local asset manager and brokers.

In June, the firm launched the L&G Gerd Kommer Multifactor Equity UCITS ETF (GERD) in partnership with German finance guru Gerd Kommer in a bid to break into the ETF savings plan market in Germany.

LGIM also looked to strengthen its position in the Italian retail market after partnering with Italian distributor Widiba Bank in a bid to push its thematic ETF range.

It comes as LGIMs assets under management fell by £132bn in the first half of 2023 which it said was down to rising interest rates.

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